Genuity files Chapter 11
BOSTON (AP) -- Internet backbone company Genuity Inc. filed for bankruptcy protection Wednesday as part of an agreement that will transfer its assets to Level 3 Communications Inc. for $242 million.
Genuity's fall into bankruptcy began in July, when Verizon Communications said it would not exercise an option to regain control of the Broomfield, Colo.-based company, putting Genuity in default of a $2 billion line of credit.
Genuity, Verizon and lenders negotiated for months, and Genuity managed to pay back more than $200 million, but ultimately failed to negotiate a settlement that avoided bankruptcy.
The companies said Level 3 would operate Genuity as a separate business still based in Woburn, Mass. If the plan is approved by a U.S. Bankruptcy Court judge, creditors would receive Level 3's $242 million. They would also get any cash left over on Genuity's balance sheet after it funds operations. The company currently has $800 million in cash.
America Online uses Genuity's network for both its dial-up and high-speed DSL service.
Roxio buys Napster's remnants
SAN FRANCISCO (AP) -- Software maker Roxio bought the remaining intellectual property assets of the now-defunct song-swap company Napster for just over $5 million in cash Wednesday.
The deal went through immediately following a Delaware bankruptcy court's approval.
Santa Clara-based Roxio, which specializes in CD-burning software, snapped up Napster's patents and brand name for the cash, plus $300,000 in warrants for shares of Roxio common stock.
Roxio officials haven't announced what they'll do with the file-sharing company's leftovers, though earlier this month chief executive Chris Gorog said Napster's intellectual property "will expand our role in the digital media landscape and enhance our offerings to consumers."
Roxio is not assuming any of Napster's liabilities. And Napster's remaining hardware -- servers, routers, computers -- remains part of the company's bankruptcy proceeding and will be auctioned off Dec. 11.
Buffett not after Burger King
OMAHA, Neb. (AP) -- Billionaire investor Warren Buffett doused speculation that he was exploring buying fast-food giant Burger King and accused others of spreading false reports.
"Obviously there are people, sometimes, who have a financial interest in spreading rumors in our supposed interest in a business or security when no such interest exists," Buffett said in a statement released through his assistant Wednesday.
Berkshire Hathaway Inc., the Omaha-based company headed by Buffett, had been mentioned as being among possible bidders for the Miami-based Burger King chain of restaurants.
The chain is being sold by its parent company, Diageo PLC of London, which wants to concentrate on its beverage business.
H-P settles stockholders suit
HOUSTON (Bloomberg) -- Hewlett-Packard Co. won a judge's approval for a $28.6 million settlement of a lawsuit by former shareholders of Compaq Computer Corp.
Stockholder Mark Berger filed the class-action lawsuit in 1998 against Compaq, now part of Hewlett-Packard, claiming that Compaq executives sold almost 2.6 million shares of stock for more than $120 million before the company warned about a profit shortfall. The executives denied any wrongdoing.
U.S. District Judge Vanessa Gilmore awarded shareholders' lawyers $8.6 million in fees, representing 30 percent of the settlement, and about $770,000 in expenses, to be taken from the settlement fund.
CPAC to buy back some shares
CPAC Inc. of Leicester announced that its board of directors authorized the repurchase of up to 252,700 shares, or 5 percent, of its outstanding common stock. The purchases are to be made from time to time in the open market or through privately negotiated transactions, when conditions warrant.
"With our current cash position of over $8.5 million ($1.68 per share), the share buyback program does not alter CPAC's strategy of growth via acquisitions or prevent the company from investing in other attractive growth opportunities," said President and CEO Thomas N. Hendrickson.
In other business news
Northrop Grumman Corp. said it plans to complete its $7.8 billion takeover of TRW Inc. on Dec. 11 and doesn't expect the government will require the sale of any businesses. Completion of the deal depends on Justice Department approval.
Tubacex SA, Spain's largest manufacturer of steel pipes, said it will close its plant in Albany, N.Y., because of falling U.S. demand for stainless steel tubes. The company will close its Altx Inc. unit before year's end, firing 90 workers, or 6 percent of Tubacex's total staff, the company said.